Are You Ready to Sell Your Business?

The right timing can make all the difference when you’re selling your business. It can ensure that your business is on the market when it has the best chance of selling for a high price. Getting the timing right will also ensure that selling up is the best thing for both you and your business.

Is now the best time to sell?

After investing so much of your time, money and energy into your business, you will want to ensure that you get the best possible price when you sell. The current market mayhave a big impact on the value of your business so it is important to check it out before selling. You can start by looking at listings and recent sales of similar businesses in your area to get an idea of how much you might get and how long businesses are staying on the market. If businesses are selling quickly then it indicates that there is plenty of demand and there should be buyers out there. If sales are slow or prices are lower than you hoped then you might want to wait a while before selling. Even a few months or a change in the seasons can make a difference to the market, especially during uncertain times.

Risks and the market

One of the most obvious risks in selling your business is that you might not get as much as you believe it is worth. Many different factors can affect the value of your business and they can fluctuate over time. When you sell your business, you will be hoping to get the best possible price, but there is a chance that prices could go up after you’ve sold.

However, there is another side to this equation that is also worth considering. The current state of the market or of the wider economy will also affect your plans for the proceeds of the sale. If you’re about to start up or invest in another business, then you might be hoping to get a bargain while prices are low. If you’re planning to retire or invest your money elsewhere, then you’ll be hoping for growth. Waiting too long to sell your business in order to maximise the immediate profits could mean that you risk missing out on these opportunities. You will need to balance these risks depending on your own situation and future plans.

Researching the market for yourself can give you some idea of what to expect, but things are always changing and your business is unique so it isn’t always easy to compare it to others. You can get a more accurate idea of what your business is worth by talking to an expert who is familiar with the local market.

Risks for your business

External risks associated with the market aren’t the only ones to think about when selling a business that you’ve put so much time and effort into. You may also be considering the risks to the business itself.

On the one hand, your business is your legacy, something that you’ve helped to create and cultivate into what it is now. Even if you’re ready to sell, you will still want to see it succeed, especially if you have employees and customers who depend on you. Getting the business into the best possible shape before the handover is the best thing you can do to ensure its future success when you find the right buyer, but you will always be taking a risk on them.

Although it can be difficult to pass over everything that you’ve built up to another owner, it can ultimately be better for the business. Business owners need to be ready to take risks in order to grow or adapt to changing times. However, as we build up our businesses and the equity that we hold in them, it can get harder to take these risks, even when they are necessary. This is especially true when you’ve been running the business for a long time, have more family responsibilities, or are nearing retirement and unable to risk your nest egg. We naturally become more risk averse as we get closer to selling. At this point, it can be better for the business to be passed on to a new owner who can take chances to bring the business to the next level.

Preparing to sell your business

The current market will determine how much you can get for your business, but it isn’t the only factor to consider when deciding when to sell. For many business owners, the deciding factor will be their own personal circumstances. Maybe you’re thinking about selling because you’re ready to retire or moving on to a new challenge. Getting the timing right for yourself can be just as important as thinking about the current market. Since you’ve put so much into your business, you may also be wondering whether the time is right to pass it on to a new owner. You can’t control the market, but there are a few things you can do to ensure your business is ready to be sold.

  • Get your records in order: well kept, up to date accounts, tax returns, and other paperwork can ensure that you get a fair valuation for your business so that you know what it is really worth. You need to prove to prospective buyers that your business is a great investment.
  • Identify potential dealbreakers: take a critical look at your business to identify anything that could make it harder to sell, such as old equipment that needs to be replaced or any unresolved disputes or legal issues.
  • Make sure you’re not irreplaceable: the business will need to work without you, so you may need to write down information that you’ve only kept in your head till now or to train your staff so they can take on some of your duties.

The simple truth is however that you can never align all the stars – the strength of the market, your business and when you’re ready.  So, all you can do is prepare the business to be ready when you’re ready to sell and doing that right will make it attractive to buyers, thus countering market forces.

Fortunately, at Business Partnership we can help you to gain a deeper understanding of what makes your businesses valuable today and prepare your business to be ready when you are. Just take one of our Value Builder Score or speak to your local partner – just enter your postcode here and we will do the rest?